NEW YORK - President Bush’s victory in Tuesday’s election is
shaping up as a potential bonanza for Wall Street, where firms are
salivating about the possibility that he will follow through on his
pledge to allow private investment of Social Security funds.

A second term for the Republican president also makes it likely
drug makers can head off governmentmandated price controls for now.
The defense industry also looks like a winner, more regulatory
victories may be in store for the Baby Bells, and look for a new
push for oil drilling in the Alaska wilderness.

While the privatization of Social Security has taken a back seat
in this current election, experts predict the president will work
with congressional Republicans, who boosted their majority in both
houses, on what would be the most dramatic changes in the
government retirement program’s 69-year history. In addition, the
president has gone on record as supporting an increase in medical
savings accounts for individuals.

Banks, investment firms, mutual fund companies and insurers, of
course, would offer to help individuals manage these new private
retirement investments, which could lead to billions of dollars in
new funds under their control and higher profits if legislation
clears Congress.

‘‘The Bush administration is more oriented toward what they call
the ‘‘ownership society,’’ said Ken McCarthy, chief economist for
vFinance Investments. ‘‘If people are going to have more control
over their assets, people are going to need advice on how to manage
those assets, and that can only help the financial services
industry.’’

That, in turn, will make financial stocks more attractive,
analysts said.

Likewise, dividend-yielding stocks — a popular asset class in
the uncertain market of 2004 — will continue to be a solid option.
One of Bush’s most popular first-term tax cuts was setting the
dividend tax rate at 15 percent, rather than normal income tax
rates of up to 38.6 percent. That tax cut expires in 2008, but it’s
expected Bush will work to make it and many other tax cuts
permanent.

‘‘It’s not coincidental that more and more companies are now
raising their dividends. It’s the first time where it’s actually
made sense from a tax perspective,’’ said Hans Olsen, managing
director and chief investment officer at Bingham Legg Advisers.

In the end, however, after a trying year on the stock markets,
most investors were simply glad to have the election decided. ‘‘The
relatively flat performance of the markets this year is a
reflection of the close race and people having no certainty over
how things were going to be after Nov. 2,’’ McCarthy said. ‘‘It’s
good to have this out of the way.’’

DRUG MAKERS

Status quo is good news for drug makers and investors in the
stocks of companies like Pfizer and Glaxo-SmithKline, which were
facing the potential of much tougher oversight on pricing under a
John Kerry presidency. Consumer advocates counter that that’s bad
news for average Americans.

Industry analysts say that with Bush in the White House and
Republicans increasing their control of Congress, government price
controls for prescription medicines won’t be on the table.

The free-market system, where demand drives price, will
continue, said Barbara Ryan, a pharmaceuticals analyst and managing
director at Deutsche Bank Securities.

Still, Bush may have to budge slightly on one of the most
contentious issues for the industry, allowing reimportation of
cheaper prescription drugs. ‘‘Reimportation may actually happen
under Bush,’’ said pharmaceuticals analyst Tony Butler of Lehman
Brothers, ‘‘but only from Canada.’’

HEALTH CARE FIRMS

Businesses have identified soaring health insurance costs as the
most critical issue facing them today, but proposals by Bush aren’t
likely to immediately slow the growth in spending for both
companies and their employees.

This year, employers will pay on average of almost $7,300 for
their share of the cost to insure a family of four and $3,137 for
single coverage, according to the survey by the Kaiser Family
Foundation and Health Research and Educational Trust. Premiums also
rose for the fourth straight year at a double-digit increases
rate.

Frank McArdle, manager of Hewitt Associates’ Washington office
said Bush may be able to accomplish measures such as capping
medical malpractice awards and lessening expensive mandates on what
services insurers must provide.

But because of factors such as the aging population, expensive
drugs and technology and the growing number of uninsured, ‘‘there
is not going to be a huge relief in costs,’’ he predicted.

The president also is expected to renew his push for legislation
that provides tax benefits to businesses and their employees if
they contribute to Health Savings Accounts.

He also wants Congress to give low-income families a $1,000
direct contribution to their HSAs along with a tax credit to help
them purchase insurance policies.

Firms that offer such policies such as Golden Rule Insurance
Co., a division of UnitedHealth Group; Fortis Health, a division of
Fortis and the American Medical Security Group may benefit.

HSAs allow Americans to use pretax money to cover medical
expenses, but they must be combined with a high-deductible
insurance policy.

While Bush signed into law last year legislation passed by the
Republican-controlled Congress that provides a prescription drug
benefit for Americans covered by Medicare, the program has been
slow to gain consumer acceptance.

The measure also increased reimbursements to companies like
Humana, Coventry Health Care and PacificCare Health Systems that
run managed care programs for Medicare beneficiaries.

ENERGY

The president is likely to call on Congress to revive stalled
legislation that would have allowed private companies to search for
oil, coal and natural gas on federal lands currently off limits to
exploration and production, including Alaska’s Arctic National
Wildlife Refuge. Such a move, part of Bush’s plan to reduce the
country’s rising dependency on imports, could benefit large
petroleum producers such as BP PLC, Anadarko Petroleum Corp. and
Devon Energy Corp.

Bush also wants to make it easier for the oil industry to build
new refineries. There hasn’t been a new refinery built in the
United States in 28 years and the industry complains about meager
profit margins, hefty environmental costs and too much government
regulation.

Bush will push Congress to require reliability standards for
power lines and provide incentives for new power line construction,
measures that are widely backed among power producers, such as
American Electric Power Co., and makers of power grid equipment,
such as American Superconductor Corp.

Opposition to new power line construction typically occurs among
consumers concerned about environmental and health effects. Bush
supports the construction of new nuclear-powered generating
stations, but opposes enacting federal requirements for utilities
to use renewable fuels such as wind, arguing that should be up to
the states.

He favors market-based approaches to reducing pollution, but
supports a 10-year, $2 billion governmentsponsored program to
develop cleaner ways to burn coal, a potential boon to coal
producers such as Massey Energy Co. and owners of coal-fired power
plants such as Duke Energy Corp.

The president’s hands-off policy on energy prices is expected to
continue. And he is likely to continue pumping oil into the
government’s Strategic Petroleum Reserve and reject calls to use
the government oil except to counter a major supply disruption.

FINANCIAL SERVICES

In addition to benefiting from Bush proposals for Social
Security privatization and health savings accounts, the nation’s
brokerage firms and asset managers, including mutual fund
companies, could be aided by a rising stock market.

‘‘This should give the incentive to investors to look at
financial stocks of companies that would manage these private
assets,’’ said Sam Stovall, chief investment strategist at Standard
& Poor’s in New York.

‘‘And if we have more money flowing into the equity markets, the
capital markets divisions of diversified financial service
companies should do well.’’ Still, Bush’s pledge to try to make
permanent the tax cuts he won in his first term — despite the
widening federal budget deficit — could be a negative for some
financial services companies.

‘‘I think it would have been more positive for financial
services stocks if Kerry had won,’’ said Val Colasanto, assistant
portfolio manager at Appleton Partners in Boston. ‘‘He would have
been more likely to address some of the budget deficit issues we
have, which would have had more favorable long-term interest rate
impact.’’

The higher rates likely to result from high deficits ‘‘would
hurt fixed-income markets and be a drag on equity markets over
time,’’ Colasanto said.